In re- AFFORDABLE PATIOS & SUNROOMS, dba Reno Patio and Fireplaces
- Summarized by Lars Fuller , BakerHostetler
- 11 months 2 weeks ago
- Case Type:
- Business
- Case Status:
- Affirmed in part and Reversed in part
- Citation:
- BAP No. NV-21-1085-TFL (9th Circuit, Apr 13,2022) Not Published
- Tag(s):
-
- Ruling:
- BAP for 9th Cir. affirmed in part and reversed in part ruling of bankruptcy court (D. Nev.) overruling chapter 7 trustee's objection to unsecured claim. Indian Tribe held valid sales tax claim entitled to priority. Penalties were not entitled to priority under 507(a)(8) because they were not in compensation for actual pecuniary
loss.
- Procedural context:
- Bankruptcy court (D. Nev.) denied chapter 7 trustee's objection to creditor's claim and assertion of priority. Chapter 7 trustee appealed to BAP for 9th Cir.
- Facts:
- Prepetition, Richard Taylor controlled and operated Affordable Patios & Sunrooms (the “Debtor”), a licensed contractor. The Debtor rented property from "Mill Street Auto," which Mr. Taylor also controlled and
operated. Mill Street Auto was a retail auto sales company that rented property from RSIC, a federally recognized Indian colony organized pursuant to the Indian Reorganization Act of 1934, 25 U.S.C. § 5123. RSIC was the beneficial owner of the leased property; legal title was held by the United States Government in trust for RSIC. Mill Street Auto owed sales taxes to RSIC for the sale of vehicles on RSIC property. After the Debtor filed bankruptcy, the bankruptcy court entered an order finding Mill Street Auto to be an alter ego of the Debtor and substantively consolidating its assets and claims with the Debtor.
- Judge(s):
- Taylor, Faris, Lafferty
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